ON 1/1/2000 WWE COMPANY PURCHASED ALL OF THE STOCK OF NBA COMPANY AT BOOK VALUE.
ID: 2493061 • Letter: O
Question
ON 1/1/2000 WWE COMPANY PURCHASED ALL OF THE STOCK OF NBA COMPANY AT BOOK VALUE.
ON 1/1/2010 WWE ISSUED $1,000,000 OF 10% 2O YEAR BONDS AT 102 ($1,020,000).
INTEREST IS PAID ANNUALLY ON JANUARY 1ST.
ON 1/1/2014,NBA PURCHASED THESE BONDS FOR $968,000.
MAKE THE ENTRY WWE MADE WHEN IT SOLD THE BONDS IN 2010
MAKE THE ENTRY WWE MADE EACH DECEMBER 31 FOR INTEREST
MAKE THE ENTRY NBA MADE WHEN IT BOUGHT THE BOND
MAKE THE ENTRY NBA MAKES EACH DECEMBER 31 FOR INTEREST
MAKE THE WORKSHEET ENTRIES NEEDED IN 2014
MAKE THE WORKSHEET ENTRIES NEEDED IN 2015
Explanation / Answer
Books WWE 01-01-2010 Cash/Bank 1020000 10% Bonds Payable 1000000 Premium on Bonds Payable 20000 31-12-2010 Interest Expense 100000 Amortisation of Premium 1000 Interest Payable 101000 Books of NBA 01-01-2014 Investment in Bonds of WWE 1000000 Discount on Bonds 32000 Cash/Bank 968000 31-12-2014 Interest Receivable 100000 Discount on Bonds 2000 Interest Revenue 102000
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